General Mills puts squeeze on Saatchi

Saatchi & Saatchi Worldwide CEO Kevin Roberts is under the gun to show General Mills some love.

Although the food marketer issued a terse, half-hearted statement of support for its Publicis Groupe-owned lead agency following the mass departure of 17 members of Saatchi's General Mills team Feb. 14 (an exodus General Mills' observers swear it did not engineer), it is clear that Saatchi is going to have to fire on all cylinders to keep the $250 million-plus business.

While executives close to the marketer say some good may come to General Mills as a result of the abrupt change to its agency staffing in terms of getting new talent and inspiring more serious agency attention to its business, the prevailing sentiment the marketer has expressed to Saatchi's top brass is displeasure. Saatchi is in trouble because it allowed this to occur.

"They were asleep at the switch, they lost good people and they put [General Mills] in a bind," said one executive close to the situation. Although he dismissed the scenario that the group of defectors would get the business as part of a new entity, he did say that if things deteriorated at Saatchi, General Mills could consider a move elsewhere.

SIGN OF DISCORD

Officially, General Mills has said only that it can "confirm that we continue to be pleased with Saatchi's work on our behalf and we are looking forward to continuing our 80-year relationship." For just how long is the question.

One sign of the discord that prompted the departure of vice chairman and worldwide account director Mike Burns and, soon afterward, much of his team, is the Feb. 14 timing of the group exodus. Valentine's Day at Saatchi is seen as a day of honor internally for Mr. Roberts' book, "Lovemarks: the Future Beyond Brands." Mr. Roberts declined to comment.

However deep its ire, General Mills is being forced to publicly state support for the agency (if one sentence oft-repeated can be seen as support) in the hopes of helping Saatchi draw new talent and appease the existing talent that still faces the not-so-simple task of building the company's brands-and fast.

General Mills is still struggling to catch up to Kellogg in the cereal arena, where Saatchi-led adult brands Wheaties and Total have not fared well despite their on-trend health profile. And the launch of Kellogg's Tiger Power threatens to encroach on Mills' ubiquitous toddler snack, Cheerios, also long handled by Saatchi.

Saatchi last week announced its first new hire to begin the process of staffing up. Pete Johnson, a former VP-creative director from Time Warner's Cartoon Network, was brought on as senior VP-creative director on the Mills business.

It is the loss of the creative talent, in fact, that General Mills bemoans most and would likely welcome back from the group that abandoned it. But no plans for any of the group to return have yet been announced, and the chances become less and less likely as the agency looks to quickly fill the remaining positions.

Peter Hubbell, exec VP-senior group account director at Saatchi, whose time has been split with the Pillsbury account, has been taking on more responsibility for General Mills-as has most anybody who has been associated with the Mills brands at Saatchi.

In addition, Saatchi is expected to be marshaling resources from its offices abroad who have worked on the brands. One top agency executive suggested that it is imperative that Mr. Roberts and his team ensure that "Mills will be well cared for. It will be quite an exercise and they will jump through hoops because it's a very big business for them and, under the circumstances, they can't let them be dissatisfied for 30-seconds. The minute the ball gets dropped or a program is not well executed, that will offer [Mills] reason for concern."

That's what rival agencies are hoping for. Although speculation is still rampant that General Mills somehow gave the green light to the group to form a separate entity under Interpublic Group of Cos. or elsewhere that would be rewarded with Mills business, one person close to the situation suggested in fact the company did nothing of the kind-at least on purpose.

In any case, the breakaways' timing, right in the midst of planning, could not have been worse.

Meanwhile, at Saatchi, the walls are coming down-literally. CEO Mary Baglivo and Chief Creative Officer Tony Granger are being charged with breaking down the figurative silos that had been allowed to go up at the agency with Mike Burns and his staff and are embarking on construction projects that open up office spaces to prevent the kind of privacy that allowed such a large group to plan their coup so quietly.